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Trade of the Day: Honeywell (HON)

HON offers steady growth plus diversification to lower the risk


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(HON) has been a great stock for bulls throughout the four-year bull market, having nearly doubled from its 2009 low.  Year-to-date the stock has seen a 27% gain, but it hasn’t been parabolic — if you look at the chart you can see how it tends to consolidate for a while and then jump up in a star-step fashion.

Currently trading around $80, HON is especially appropriate now because it has units in each of the most successful current sectors. It provides avionics (aviation electronics) to the aerospace industry, heating and air conditioning equipment to the construction industry and chemicals to factories and energy producers. This week, the company said it is now moving into touch-screen instrumentation for planes, and will supply next-generation devices that look something like Apple (AAPL) iPads for new commuter jets, which are set to be built soon by Brazilian manufacturer Embraer.

Recommendation: A $79.75 limit, good till canceled, seems like the best place to enter HON, though I wouldn’t quibble over a few cents. Set the target at $85.

InvestorPlace advisor Jon Markman operates the investment firm Markman Capital Insight. He also writes a daily swing trading newsletter, Trader’s Advantage, which aims to capture profits of 15% to 40% and often as much as 100% to 200% in less than 90 days. 

Professional traders and hedge funds make huge profits off volatility.  Now, Jon’s service CounterPoint Options levels the playing field with the first service geared towards helping individual traders make steady, consistent profits with the VIX.  Get more information on Trader’s Advantage and CounterPoint Options today.

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